‘Safety-net’ hospitals: Extending a financial lifeline

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Community and safety-net hospitals in Massachusetts need help. They provide vital care for many low-income residents, and their finances are disproportionately dependent on Medicaid reimbursements. But the per-patient payments they receive are far lower than those paid to larger academic hospitals.

State Senate budgeteers have proposed a smart way to help. They want to use a distressed-hospitals fund created in last year’s health care cost-control legislation to bump up the Medicaid rates for 28 hospitals that care for a disproportionate share of poor patients.

The recently passed Senate budget would give those hospitals a 5 percent increase in outpatient Medicaid rates and boost a previously scheduled rate hike for inpatient care from 5 percent to 10. The Senate would also hike the rates those institutions receive for psychiatric care. The total cost would be about $40 million next year.

Under current law, the distressed-hospitals money can’t go to hospitals that educate students or are part of for-profit companies. That approach excludes some hard-strapped institutions that can make legitimate claims for relief — Boston Medical Center, which is a teaching hospital; the Brighton, Dorchester, and Quincy hospitals owned by for-profit Steward Health Care. One analysis suggests that up to 19 of the state’s disproportionate-share hospitals would be shut out.

The Senate’s proposal would look even smarter if, as seems possible, the federal government agrees to reimburse 50 percent of the new Medicaid spending. The Senate proposal isn’t a permanent solution for community and safety-net hospitals. But as a short-term measure, lawmakers should embrace it.